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Welcome to News & Events

Published on December 20, 2011, by in Industry News.

Welcome to The Fraud Practice’s FraudBlog; your source for updates on current events, commentary and best practices related to the eCommerce CNP payments and fraud industry.

Be sure to signup to see all of our content to include our free monthly FraudBlog Newsletter.

 
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The Fraud Practice Releases New White Paper Helping Merchants Build the Business Case to Consider Outsourcing Manual Reviews

Since many merchants rely on manual reviews for effective risk management they should be performed in the most cost effective way. This white paper is focused on building the business case for making considerations around maximizing the net benefit of performing manual reviews, whether they are performed internally, by a third party or a combination of both.

The Fraud Practice’s latest white paper, titled “Building the Business Case: When it Makes Sense to Outsource Manual Reviews”, seeks to help organizations build out this business case and is available for free today.

Request your copy of this free white paper.

 
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Register for Webinar Discussing Key Findings from 2nd Annual Consumer Authentication Survey on April 16th

The Fraud Practice and CardinalCommerce are hosting a webinar on Thursday April 16th at 2:00 PM ET / 11:00 AM PT to discuss the most significant findings and implications from this year’s Consumer Authentication Survey. All who register for the webinar will receive a free copy of the Use of Consumer Authentication in eCommerce white paper.

Now in its second year, the Consumer Authentication Survey once again collected industry perspectives regarding the market sentiment, use and implementation of Consumer Authentication programs such as Verified by Visa and MasterCard SecureCode. After setting the baseline with the inaugural Consumer Authentication Survey, the second annual edition provides insight on who is using Consumer Authentication today, how they are using it, what the industry thinks of this technique and why, as well as what has changed in the past year.

Whether or not Consumer Authentication programs are used or supported by an organization today, the experience and information shared by others in the industry can provide useful context and insights. The important trends, key survey findings and market implications from the 2nd annual Consumer Authentication Survey will be highlighted in the April 16th webinar hosted by CardinalCommerce and The Fraud Practice, while full survey results are detailed in the white paper that will be provided to all attendees.

Register for the webinar

 
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Merchants Should Already be Planning for Increased Fraud Attempts Post-EMV

According to forecasts from Aite Group nearly all credit cards issued in the U.S. will have EMV capabilities by 2018 when CNP credit card fraud losses are expected to reach $6.4 billion in the United States. As EMV cards become commonplace among U.S. cardholders it will make counterfeit card fraud more difficult and drive more fraud attempts to the online channel. CNP merchants should already be preparing for increased fraud attempts, considering how it may impact manual review loads and if current risk management strategies should be supplemented with additional tools and techniques.

As EMV or Chip-and-PIN cards began to phase out magnetic-stripe payment cards in the UK, Canada and several other countries, fraudsters started migrating online and to other Card Not Present channels. While counterfeit card fraud in Canada fell from $245 million CAD in 2008 to $112 million CAD in 2013 after five years of chip cards, CNP fraud increased from $128 to $299 million CAD over this same time frame. Card Not Present fraud increased more than 300 percent in the UK following the rollout of Chip-and-PIN. A similar sequence of events is expected in the U.S. as banks issue EMV, or chip, cards to replace the less secure magnetic-stripe predecessors in time for the October liability shift deadline.

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How Manual Review Metrics Vary Across Small and Large Merchants

It can be difficult for merchants to really understand how well they are performing with manual reviews for online fraud management relative to their peers. In this FraudBlog post we look at merchant reported statistics from three surveys covering merchants of all sizes in North America and the United Kingdom highlighting major differences between high and low revenue e-tailers.

One key metric is the manual review rate, or number of transaction attempts that are queued for a manual review. This varies greatly by merchant volume as merchants processing tens or hundreds of million transactions per year cannot feasibly review a high portion of order attempts. Many start-up and smaller merchants, on the other hand, may review nearly any transaction that isn’t squeaky clean.

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Early Warning Acquires Authentify and their Multi-Factor Authentication Technology

Early Warning, the cooperative owned by five of the largest U.S. banks that provides risk management services to financial institutions and payment companies, announced their plans to acquire mobile-based authentication provider Authentify on April 7th while terms of the acquisition were not disclosed.

Authentify, which provides multi-factor authentication services primarily centered on mobile devices, was a natural fit for Early Warning as they have many financial institution clients that are increasingly seeing more account openings, other good business and fraud occur via mobile banking. Authentify provides services that are often used for performing additional authentication with online and mobile banking access, or even used to replace the use of username and password logins.

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U.S. House Members Form Congressional Payments Technology Caucus

Four members of the House of Representatives formed a bipartisan committee known as the Congressional Payments Technology Caucus (CPTC) announcing the new group on March 19th. The group’s focus is to serve as a key resource of information for any discussions on future legislation around payment-centric topics such as data security, new payment technologies and access to electronic payments for the underbanked.

Lawmakers don’t have the best track record when it comes to regulations and legislations around payment related issues, with unintended consequences following the Durbin Amendment serving as one example. In hopes to help lawmakers better understand the payment issues at hand four members of the House of Representatives formed the Congressional Payments Technology Caucus.

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Amazon’s Dash Button Brings One Click Ordering to a Little Piece of Hardware

On the last day of March Amazon launched their newest feature, the Dash Button. The tiny piece of hardware, about the size of a thumb drive, connects to Wi-Fi and allows consumers to reorder products through Amazon by simply pressing a button. Each Dash Button is brand specific and 18 partners were on board at launch.

One of the primary goals with payment methods and technology is to make payments as frictionless as possible. Consumers tend to spend more with payment cards than they do when handling physical cash; Amazon and their Dash Button partners hope that making a transaction as easy as pushing a button will lead to more sales as well.

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Recent Hiccups Hindering Apple Pay

A recently released consumer survey finds that more than two-thirds of people who attempted using Apple Pay in-store had problems at the point-of-sale and many were not able to make the purchase from their mobile device. These consumer frustrations follow recent news of lax authentication with issuing banks leading to high rates of fraud on cards from at least a handful of financial institutions.

Apple Pay has gotten off to a fast start as it is already accepted at more than 700,000 locations and supported by 2,500 issuing banks in the United States. It sent a jolt through the mobile payments market and likely influenced major acquisitions and investments from competitors now launching Android Pay and Samsung Pay services. There have been a few bumps in the road, however, and a new survey weighing in on consumer experiences with the mobile contactless payment system highlights some of these issues.

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Get Ready for Facebook’s Foray into Payments

Facebook announced new features to their Messenger service in March allowing users to make P2P payments, but didn’t stop there. They have since announced plans to enable consumers and merchants to communicate via Facebook about purchases, known as Business on Messenger, and have started testing “Buy” buttons directly within advertisements that appear on a user’s News Feed.

In 2014 Facebook spun off the Messenger feature, originally part of the Facebook mobile app, into an app of its own. Although many users objected the company was determined to have users download the separate Messenger app as these features were discontinued within Facebook for mobile. While it left many Facebook users disgruntled, this transition was likely the planned early steps in preparing a bigger push into payments. Just a few months prior to this transition Facebook hired PayPal’s then president, David Marcus, as VP of Messaging Products.

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Optimal Payments to Combine Digital Wallets Neteller and Skrill following Acquisition

In late March Optimal Payments, the company behind the e-wallet Neteller, reached an agreement to acquire one of their primary competitors, Skrill, for €1.1 billion ($1.2 billion) in a reverse-takeover deal. Both companies offer digital wallets and payment services while both are also well known in Europe and in the online gaming and gambling markets.

Formed as Moneybookers in 2001 and later rebranded as Skrill more than a decade later, the London-based payment service provider offers a payment gateway service as well as an e-wallet and prepaid card consumers can use both on- and offline. The company reports there are over 36 million consumer accounts and more than 156,000 businesses using their services. They facilitate payments in 200 countries, across 40 currencies and over 100 local payment methods.

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